Draft decision allowing Charter to buy Time Warner is a good deal for California

2 May 2016 by Steve Blum
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A plan to upgrade ancient, analog cable systems in the Salinas Valley and elsewhere in California to full digital capability could be on the California Public Utilities Commission’s agenda as soon as next week. A CPUC administrative law judge has recommended approval of Charter Communication’s proposed purchase of Time Warner and Bright House cable systems, with a long list of conditions that include digital upgrades for at least 70,000 analog homes and line extensions to 80,000 more that have no service at all.

It could be even more than that. The proposed decision would also require Charter to “convert all households in its [new, combined] California service territory to an all-digital platform with download speeds of not less than 60 Mbps”. It’s hard to know for sure how many homes might be involved, but one estimate I did earlier this year put the number north of 200,000 homes, perhaps considerably north.

Approval of the draft decision would result in tens of millions, maybe hundreds of millions, of dollars of capital investment in California’s broadband infrastructure that, so far, hasn’t been made and, on the evidence, would never be made otherwise. The communities that would benefit are those that are the least likely to be targeted for privately financed digital upgrades and build outs, absent this incentive.

The draft decision also has one other essential clause, which would allow separate agreements between Charter and affected communities, such as the City of Gonzales in the Salinas Valley, to be enforced directly by the CPUC. By aligning everyone’s interests, it puts teeth into those agreements and gives the CPUC motivated allies on the ground.

The CPUC should approve the draft decision that’s in front of it, as is.

I’m assisting the City of Gonzales with its efforts at the CPUC and its negotiations with Charter. I am not a disinterested commentator. Take it for what it’s worth.